Can Spending Money Really Make You a Better Person?

Conventional wisdom says money can’t buy happiness, but scientists think otherwise. Opening your wallet can make you happier, research suggests, but only if you spend on the right things. The satisfaction that comes with a new iPhone or 4K TV will wear off quickly, according to Thomas Gilovich, a professor of psychology at Cornell University, who’s studied the connection between spending money and happiness. Splurging on a vacation or other experience, on the other hand, may provide lasting happiness.

Now, Gilovich has uncovered another benefit of putting your hard-earned dollars toward experiences, not things. Doing so can make you a more grateful, generous person.

Gilovich and his co-researchers, Amit Kumar and Jesse Walker, conducted several experiments to better understand how spending money in different ways affected a person’s emotions and behavior toward others. They found “a certain type of consumption — experiential consumption — is more likely to foster feelings of gratitude than the consumption of material goods. And by prompting greater feelings of gratitude, it also leads to more prosocial behavior.” The study results appeared in the journal Emotion.

“Think about how you feel when you come home from buying something new,” Gilovich said in a statement. “You might say, ‘This new couch is cool,’ but you’re less likely to say ‘I’m so grateful for that set of shelves.’ But when you come home from a vacation, you are likely to say, ‘I feel so blessed I got to go.’ People say positive things ab­­­­out the stuff they bought, but they don’t usually express gratitude for it — or they don’t express it as often as they do for their experiences.”

People shop for TVs at a Best Buy | SANDY HUFFAKER/AFP/Getty Images

The feelings of gratitude that come after attending a concert or visiting a bucket-list destination change people’s behavior. One part of the study involved participants recalling either a significant material or experiential purchase. Then, they were asked to divide $10 between themselves and an unseen second person. Those who’d recalled an experience were significantly more generous to their partner than those who’d been instructed to think about material purchases.

The researchers had some theories about why spending money on experiences seemed to make people kinder and more generous. For one, when we buy experiences, they tend to be in line with our values, which “is likely to promote more of a sense of gratitude than dividing one’s attention between what one has and what others have,” the study’s authors wrote. Experiences also contribute to our sense of identity and social connection. Both can make us feel more grateful.

The type of gratitude people feel when reflecting on an experience they purchased matters as well. Often, our feelings of gratitude are targeted. You might feel grateful toward your grandmother because she bought you the perfect Christmas present. When you feel this kind of gratitude, you’re often inspired to give back to a specific person. But gratitude is sometimes untargeted, like when you experience a general feeling of thankfulness for having good luck. In those cases, a general feeling of gratitude can inspire you to “pay it forward” to another person.

“The emotional state of feeling grateful when there is no one to thank — when one feels grateful for being alive, for good fortune, or, yes, for an unusually satisfying experience — can lead to a powerful urge to do something with that gratitude, such as giving to anonymous others,” the researchers wrote.

The warm and fuzzy feelings that buying experiences generate could also create a “positive feedback loop,” the researchers said. People might buy experiences, feel grateful, and then buy more experiences rather than material goods to perpetuate the feeling. On a large scale, such a shift in spending habits could lead to a more generous society. The researchers even suggested governments might want to look into ways they could encourage people to buy more experiences and thus promote a cooperation and kindness.

“If public policy encouraged people to consume experiences rather than spending money on things, it would increase their gratitude and happiness and make them more generous as well,” Gilovich said.